Hacker News Reader

Comment by jrockway | Hacker News Reader

Clearly the prison lobby needs to have more things made illegal, like eating certain plants, or writing software to allow blind people to read e-books. They also need to make the sentences longer -- mandatory life in prison for everything. Finaly, they need to lower the minimum wage and cut government services, so more people are desperate enough to commit crimes.

That will solve their problems... it worked for the US, anyway.

View on HN

Finaly, they need to lower the minimum wage and cut government services, so more people are desperate enough to commit crimes.

Or better yet institute an extremely high minimum wage, so that if you're an unskilled laborer you remain unemployed because walmart greeters' labor isn't worth $20 an hour just because the government said it is.

After all, it's not like working 0 hours a week at $20 an hour would make someone as desperate as working 40 hours a week at $5 an hour...

Probably like that, you mean? http://www37.wolframalpha.com/input/?i=unemployment+us+nethe...

I never said anything about the Netherlands' unemployment rate. I said that all else being equal, the country with the higher minimum wage will have higher unemployment, because there is a larger barrier to entry to the job market.

But if you would care to explain how a business that takes in some amount of revenue (say $100,000 a month) can magically afford to hire more employees when the minimum wage goes from $7 an hour to $15 an hour, I'm all ears.

This is easy. When all your competitiors have to pay higher wages it drives consumer prices up and so your revenue goes up as well such that you can also pay higher wages. It only breaks down when some stores do not abide by the rules or when there is a substitute. Substitutes of course can be hunted down and taxed as well, to maintian equilibrium.

As a side not, kindly lay off sarcasm. Thanks.

This is easy. When all your competitiors have to pay higher wages it drives consumer prices up and so your revenue goes up as well such that you can also pay higher wages.

This is an argument for the ability of a business to keep the same number of employees, not to hire more. Keeping the same staff you had the day before doesn't make the unemployment rate go down.

This also assumes that your revenue goes up, which may not be the case since the government has instituted a staff-wide pay raise, but not all of your customers' incomes have gone up as well.

And sarcasm is sometimes a very effective way of getting a point across. Sarcasm in my opinion is fair game; being malicious is something else altogether.

*also, this doesn't answer the most basic question that proponents of higher minimum wage never seem to be able to answer, which is - if $5 an hour is bad, and $15 an hour is great, why not $30 an hour? And $50 an hour would be amazing, lifting people right out of poverty within weeks! So why not? After all, the unemployment rate doesn't go up as the minimum wage increases, right?

$5/hr * 40 hrs/week * 50 weeks/yr = $10,000/yr salary is not really enough to survive.

$15/$5 * $10,000/yr = $30,000/yr is.

The point is not to make minimum-wage workers rich -- just enough so that they should be able to survive without having to work insane hours.

And by your logic, if businesses can hire X new employees per year at a $5 minimum wage, then they should be able to hire 5X new employees with a $1 minimum wage. So should we lower the minimum wage even more so that businesses can hire more people and thus lower unemployment rates?

The point is not to make minimum-wage workers rich -- just enough so that they should be able to survive without having to work insane hours.

$30k a year to survive isn't some natural law - when you make minimum wage $15 an hour, the prices for goods and services based on minimum wage labor goes up, and $30k a year is no longer enough to survive, so somebody gets the bright idea to say "hey we need to make the minimum wage higher..."

also, you didn't refute my argument - if the minimum wage has nothing to do with the unemployment rate, then there would be no reason not to raise the minimum wage to something extremely high like $50 an hour. Of course, in reality, there is a very good reason not to make the minimum wage $50 an hour - it would cause much of the country to become unemployed.

So should we lower the minimum wage even more so that businesses can hire more people and thus lower unemployment rates?

Not to lower unemployment rates; you should lower it because a marketplace of individuals making voluntary exchanges is much better at deciding the value of someone's labor than the government is.

The bottom line that for some reason people refuse to accept is just because you legislate it doesn't make it so. Wal-mart greeters don't make $50 an hour for a good reason - their labor doesn't generate anywhere near $50 an hour in extra revenue, and many people are willing to do the job for much less. (Sure you can arbitrarily decide to pay them $50 an hour, but don't act surprised when a candy bar becomes $10 and a gallon of gas goes up to $25 to compensate).

In my view, there are some aspects that go beyond the traditional ideological boundaries in this debate. Regardless of what minimum wages do to unemployment, there's also the question of what they do to innovation.

If a business has a large supply of cheap labour, what is the incentive to use technology to reduce dumb work? There's undoubtedly less incentive and therefore I think a case could be made for high minimum wages in order to foster innovation.

At the end of the day, I believe that high tech societies have less unemployment, and apart from that reducing dumb work is what I consider progress for humanity.

On the other hand, high minimum wages are a disincentive for some people who do dumb work to learn something and become innovative themselves. So this is a counter argument to some degree. However, there are a lot of people who will never become educated or innovative or entrepreneural and pushing them into abject poverty violates my sense of human dignity.

Human dignity is the answer to your question of why not $50 minimum wage. It's subjective, I agree, but people living in a card board box violates my sense of human dignity as does watching people die from treatable diseases. Not being able to buy each new edition of the iPhone does not violate my sense of human dignity, nor does living in a run down neighbourhood.

One question that opponents of minimum wages never answer is what about the next generation? You can take the position that people who do nothing to help themselves deserve to live in poverty. But poverty is passed on to the next generation. Some admirable individuals are able to break that viscious cycle but most are not. It's very difficult to help the kids of poor people gain access to equal opportunities without to some degree helping their parents.

I'm afraid there's no way around spreading the wealth around a bit to people who may not deserve it if you want equal opportunities for the next generation.

The supply of cheap labour gets diminished by companies competing for employees thereby raising the wage.

Abolishing the minimum wage does not mean, that suddenly all former minimum-wagers have to work for free.

That's true, but some people really have very little to offer to the market. Too little to support themselves economically. That's the sad truth. And unrelated to that, minimum wages are a tax on dumb work. I like that.

I guess we agree that one should make sure everyone has enough income to live. Something like basic income (or so) might do a better job than a minimum wage.

I totally agree. Basic income is a hugely better idea than minimum wage, but politically very difficult to push through.

I often hear basic income heralded as a sweeping reform. Perhaps one should try to position basic income as relatively small step to contain bureaucracy: All means of state welfare (and we have a lot of them in e.g. Germany) will be combined into one; and as the state already knows how much money you make for tax purposes, it just re-uses that knowledge to determine your basic income allowance.

But isn't the problem exactly that only a sweeping reform - i.e. basic income replacing all the other benefit schemes - will actually lead to the kind of reduction in red tape that makes the system pay for itself?

Obviously, this is a rather intricate matter and very dependent on the particular welfare system you're talking about. I don't know anything about the german one.

But I think, politically, the big issue is the idea of handing over money to people without requiring them to look for work. That's a tough nut to crack, no matter how convincing your anti bureaucracy stance is. I doubt that it's going to happen.

The problem is partly social in nature IMHO: if you allow people to make unsustainable minimum wages (by that notion you could also allow child labour, Manchester Capitalism, Darwinian chaos etc.) so that they cannot afford health care, legal protection, education, transportation, it becomes easier to prey on the weak. In effect you are breeding a class society based on money.

Adam Smith ("invisible hand of the market") was quite aware of the Darwinian nature of business people, who will try any angle to "conspire against the public". The free market is effective, yet must kept under control by the law. Certain labour standards are part of that equation.

> that they cannot afford health care, legal protection, education, transportation, it becomes easier to prey on the weak. In effect you are breeding a class society based on money.

If their labor is not worth the minimum wage, they can't afford such things either. Giving them such things has horrendous social effects. (Yes, govts prey on people that they "help".)

We want more people working at low value jobs not so much because that lets them support themselves, but because that's how folks learn to produce value.

Besides, if I'm going to pay someone, is it really better to pay them to watch TV than to carry my groceries?

The best protection of "workers rights" is a worker's ability to work for someone else who better meets said worker's needs and desires.

You are free to employ sarcasm and indignation as you see fit but in that case I shall bow out of this otherwise interesting conversation.

> I said that all else being equal, the country with the higher minimum wage will have higher unemployment, because there is a larger barrier to entry to the job market.

While this seems a straight-forward thought, the fact whether or not minimum wages affect employment is undecided amongst economists.

Charges of ideological bias are flung from both sides, but there seems to be no concensu: "Until the 1990s, economists generally agreed that raising the minimum wage reduced employment. This consensus was weakened when some well-publicized empirical studies showed the opposite, but others consistently confirmed the original view. Today's consensus, if one exists, is that increasing the minimum wage has, at worst, minor negative effects." [1]

http://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies

[1] http://en.wikipedia.org/wiki/Minimum_wage#Surveys_of_economi...

the fact whether or not minimum wages affect employment is undecided amongst economists.

Income minus expenses still equals the bottom line, right?

I mean if you have two businesses on the internet selling the same product and one has three times the labor cost of the other, math doesn't suddenly change because economists can't get their act together, does it? Some real, live businessperson still has to add and subtract to eek out a business model, right?

Or perhaps I missed something. It sounded like you were making a macro-economic argument in response to a micro-economic one.

An interesting side note: Forbes magazine had an article a couple of decades ago on a study comparing McDonalds franchises which found that those who paid more than minimum wage were more profitable than those that paid minimum wage (and yes the study did control for socio-economic status of the location: it was an apples to apples comparison).

discojesus, have you been to Europe much?

There are no "useless" jobs like Wal-Mart greeters here. There are no Wal-Marts, or equivalents. The majority of people either run or are employed by what the US would consider very tiny businesses indeed... and those businesses are more critical to their community than the typical American business, by far.

That hasn't been factored into your equation.

Well, Walmart owns ASDA, one of the dominant chains in the UK. No greeters, though - what a bizarre concept.

The UK may be technically in the EU, but it is not European in currency or culture. It's much much more American than the other EU members.

"European" culture is much more diverse than a lot of people think, including a lot of people in Europe.

I find that people that talk about "European" culture tend to refer to the culture of western part of continental Europe, usually excluding Eastern Europe, Turkey, Scandinavia, the UK, Ireland etc.

But even with a view that limited, there are vast cultural differences even within that group.

There is no unified European culture (nor currency). There are certain limited areas where different but large subsets of Europe share common ideals, but that's it.

Actually, coming from a country with a high minimum wage ($16/hr+), the idea of a company paying some otherwise-unemployable warm body $5/hr to stand at the door and do nothing all day except say hello to indifferent customers seems bizarre to me - not to mention demeaning and perverse.

Our unemployment benefit is $6.20 an hour. I'd rather the poor guy stays at home, works on his novel or something, and keeps his dignity.

Staying at home means watching TV for a lot of unemployed people. Getting any job is often better.

Agreed. One of the problems with some of the welfare models is that it's often very hard to get people out of them once they've adapted to being jobless and doing nothing.

Well, yes, that's definitely an issue. But some people, you know, they're just hopeless and they wouldn't do anything productive anyway. May as well have them watching television, at least they won't go crazy with resentment after being forced to be a freaking greeter for 5 years.

And not all people will be like that. If just 1 in 5 people get bored, start studying, turn their life around and start pulling $120k, their tax pays for the other 4, plus the GDP per capita of the five quadruples.

It can and does happen. I know a guy who was an unemployed bum for a few years, then got bored, spent 2 years teaching himself computer animation, then got a job at a major animation studio (two of their productions playing in cinemas now). He probably "paid back" that measly trickle of benefit payments in 1 year.

I pretty much support an untested basic payment for all low income earners, actually, because of that and other experiences. Just gives people a base, a safety net. They might want to do nothing but watch TV, but they might want to do something good, too. Just gives people the support they need. And because of human nature, and general societal pressure to succeed, people do step up, eventually.

(edited to remove potentially identifying personal information)

which country?

Australia.

Whose says a greeter is totally useless? I believe it's party done to prevent loss, as when people are greeted when they enter a store/shop they're less likely to steal something.

Reply on news.ycombinator.com